Incoming NZ tax law is looking good

There’s been some discussion in the New Zealand media about upcoming changes to New Zealand tax legislation that relate to storing data in the Cloud. It’s great to see that the government is “getting it” on this score and changing the law to take account of innovation in the Cloud.

The legislation, which is currently before Parliament – the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Bill, Ref 325-2, – will enable hosting providers to apply to the IRD for an exemption on behalf of all their customers. Xero plans to immediately apply on its customers’ behalf once this is available.

With that legislation on the way, supported by business and Government, our understanding is that there isn’t an issue in the meantime for Xero users. Just because you use Xero does not mean you have to go out and apply for an exemption from the IRD. Imagine the paperwork if everyone did that! Rather, if you have concerns until the laws are passed, best to contact the IRD, and you may want to ensure you have retained physical or electronic copies of your source material (invoices, receipts, etc) in-country.

The IRD summary of proposed amendments says “The bill contains amendments to modernise the record-keeping requirements of businesses by making it easier for taxpayers to store records offshore through applications from their data storage providers.”

Technology provides easier access to data and can disrupt traditional approaches. Well done to the New Zealand government for shifting with the times.

 

3 Comments

Gayle Buchanan
July 7, 2012 at 4:34 pm

Thanks for the post, been fielding a few questions over the last couple of days and assuring them Xero will be onto it. Much appreciated and like you very pleased the government are shifting with us.

cheers

Sasha Dwyer
August 8, 2012 at 11:04 am

I think it is about time that the New Zealand Government realized that their is a better way and that it is the cloud. The sooner they start integrating it the sooner they and their people can start saving time and money.

PM
December 12, 2012 at 2:18 pm

Is there a clearly defined list of requirements on which organizations are required to retain data in New Zealand and which are not as well as which data can be held offshore and which can’t?

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